Alaska SC rules againt former board member
JUNEAU, Alaska (Legal Newsline) - The Alaska Supreme Court has upheld the decision of a lower court finding the former director of a corporate board liable for breach of fiduciary duty.
The Court, in its April 22 opinion, affirmed both the jury's verdict and the superior court's order.
In 2004, the board of directors of Chugach Alaska Corporation was divided into two factions, one led by incumbent chairwoman Sheri Buretta, who had chaired the board for several years, and the other by board member Robert Henrichs.
In March 2004, a coalition of board members voted to remove Buretta as chair and install Henrichs in her place. Henrichs served as chairman for about six months, but the board remained divided during that time.
Following the October 2004 annual meeting, a new board majority voted to reinstate Buretta. At this time, the CAC also filed a lawsuit alleging that Henrichs had engaged in a pattern of misconduct during his chairmanship that violated his duties to the corporation.
A jury verdict found him liable for breach of fiduciary duty, and the superior court order banned him from serving on the corporation's board of directors for five years.
In his appeal to the state's high court, Henrichs argued the superior court erred by refusing to instruct the jury on what he refers to as a statutory "safe harbor" defense; instructing the jury that he could be found liable for ordinary negligence; refusing to instruct the jury on his equitable defenses; and barring him from serving on the board of directors for five years.
The Court, in its 20-page ruling, said it found no reversible error in the superior court's jury instructions. Also, it said, the superior court did not abuse its discretion by banning Henrichs from serving on the board for five years. Justice Morgan Christen authored the Court's opinion.
The justices said the evidence did not show that Henrichs could avoid liability because he relied on the advice of counsel.
And while Henrichs argued that the court erred by banning him from serving on the board because his breaches were not "sufficiently serious," the issue is not included in his points on appeal or statement of issues presented for review, the Court noted.
"We agree with CAC that this argument was waived," it wrote. "Further, our independent review of the record satisfies us that the court did not abuse its discretion by banning Henrichs from serving on CAC's board for five years."
The superior court, it said, "applied the correct statutory standard."
From Legal Newsline: Reach Jessica Karmasek by e-mail at email@example.com.